"As many as 40 per cent of vegetables are rotting as there is no backend. Multi-brand retail is a model that will work and the advantages outweigh the risks. Advantages of a backend and cold-chains being formed, sourcing, quality standardisation, etc are going to mainly help our agricultural sector," Kamal Nath, Union Urban Development and Poverty Alleviation Minister said.

He was addressing the All-India management Association summit here.

Stating that the worries of mom-n-pop stores being gobbled up by the big players were unfounded, Nath, who in 2009 had pushed for retail FDI, said, out of all the cities we had only 21 cities that were eligible for the model.

"I think small and medium retail can live with large retail. I don't see people abandoning their local shops and drive 15-20 miles to a large retail outlet unless he is getting some real benefit out of that," he said.

On September 14, the government allowed 51 per cent foreign holdings by multi-brand retail chains with two caveats- one foreign retail chains like Wal-Mart, Tesco, etc will be allowed to set up shops only in those cities with over 1 million population; and secondly, they can operate only in those states, which allow FDI in retail.

Stating that the real issue was not about the FDI but about the big versus the small, he said, "The issue is not FDI in retail. It is a misinformation. The issue is big vs small. We have said FDI is allowed only in cities with over 1 million population. How many will qualify? I think only 21 cities in all the states will be able to avail of this."